Swedish Online Sportsbook Unibet in Merger Talks with Sportingbet

Written by Brian M. on 2010-11-15 at 17:31
Online sportsbook in Sweden - GamingZion
Unibet, an internet gambling site in Sweden, has begun negotiating towards a possible merger with Sportingbet, an online gambling site in the UK. Both sites have interests in online poker, virtual casinos, and bookmaking, but Unibet has additional interests in bingo and scratch cards. Merged, the combined company would be a £600 million business.

Unibet’s own pre-tax profits, have also been down. Since the online sportsbook in Sweden staked 25% on Bingo.com, the bingo site’s revenues have been plunging, earning just $97 thousand USD (£60 thousand) during the third quarter of 2010, 93% less than earned during the Q3 2009. Operational items of £1.5 million were lost on the foreign exchange. The company was also hit by unrealized exchange losses on a £1.0 loan. Thus, Unibet’s profit before tax amounted to just £24.6 million. 

Sportingbet’s revenues rose 27% during its latest financial year, with 17% of that increase in just the first 2 months according to Sportingbet CEO Andrew McIver. Live betting during an event, also known as “in play betting” increased from 56% to 61%. The World Cup accounted for £50 million out of its £208 million sales revenue.

Despite the increased revenue, Sportingbet's pre-tax profits actually dropped from £22.3 million to £6.9 million, but this could largely be accounted for by a £22.8 million settlement with the US Department of Justice. Sportingbet allegedly unlawfully accepted bets from Americans between 1998 and 2006. Without this agreement, both Sportingbet and any firm which took over or merged with Sportingbet could have been prosecuted by the US government for violating American gambling laws.

Unibet Sportsbook remains one of Europe’s largest gambling operators with 3.6 million patrons around the world. Their third quarter Gross Winnings Revenue for Q3 2010 was a £31.0 million. This brought their aggregate revenue from the beginning of the year to £112.0 million. Unibet’s Interim report January through September 2010, Unibet asserted “With many favourites losing, Unibet’s gross margin has been very favourable during the quarter. This has contributed to a strong overall result in what is usually a seasonally weak quarter.”

While the discussions between Unibet and Sportingbet have been confirmed, the talks are still currently only preliminary. Sportingbet asserts that it is actually holding dialogs with “different parties” and "there can be no certainty as to whether or not such discussions will result in any form of transaction."

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